In August 2010, the Ninth Circuit decided Greenwood v. CompuCredit Corp.,380 thereby creating a definitive split among the circuits on this issue.381 The case involved a subprime credit card offered to consumers with low credit scores advertised as a way to ameliorate credit problems.382 The agreement that the plaintiffs signed prior to receiving the card contained a mandatory arbitration provision.383 The plaintiffs filed suit in federal district court for violations of the CROA and California’s Unfair Competition Law after CompuCredit charged them $257 in fees.384 In denying the defendant’s motion to dismiss and compel arbitration, the district court held the arbitration clause invalid and void because the CROA protected the right to sue in court.385
373. See id. at 1014 (citing Garret v. Circuit City Stores, Inc., 338 F. Supp. 2d 717 (N.D.
Tex. 2004), rev’d, 449 F.3d 672 (5th Cir. 2006), in which statutory claims arising under the USERRA could not be compelled into arbitration); see also supra note 292.
374. See Alexander, 384 F. Supp. 2d at 1014–15. 375. See id. at 1015. 376. See id. 377. See id. 378. See id. at 1016. 379. See id. 380. 615 F.3d 1204 (9th Cir. 2010).
381. A petition for certiorari was filed on January 24, 2011. Petition for Writ of Certiorari, CompuCredit Corp. v. Greenwood, 615 F.3d 1204 (9th Cir. 2010) (No. 10-948).
382. See Greenwood, 615 F.3d at 1205. 383. See id.
384. See id.
The Ninth Circuit affirmed.386 Like the court in Alexander, the Ninth Circuit found that the CROA’s required disclosures provision establishes four rights made unwaivable by the anti-waiver provision of the statute.387 The court looked to the established definitions used by the Alexander court to highlight the differences between arbitration and a civil action.388 Credit Providers argued that because the “right to sue” language is contained only in the disclosure section of the statute, it does not create a separate right.389 Unconvinced, the court asserted that Congress did not intend to require credit repair organizations “to misinform consumers about a fictional right.”390
Credit Providers also argued that because the anti-waiver provision states that a waiver cannot be enforced “by any Federal or State court or any other person,” Congress intended for arbitrators to hear CROA claims.391 The court rejected this argument and stated that this language speaks to a situation in which an organization proceeds against a consumer in arbitration, at which point the consumer would retain these rights in the process of the arbitration.392 The court also pointed to the numerous usages of the word “courts” in the statute, which it interpreted as emphasizing the intended vital role of courts in CROA claims.393
Acknowledging the circuit split its decision created, the court stated that it was “unpersuaded” by the reasoning of its sister circuits.394 The court described the holdings of the Third and Eleventh Circuits as unfairly disregarding the “right to sue” provision, and rejected the analogies to Supreme Court precedent in favor of arbitration.395
In dissent, Circuit Judge A. Wallace Tashima argued that nothing in the CROA evinces an intent to void arbitration agreements.396 Judge Tashima argued that the “right to sue” language simply establishes what must be communicated to consumers, and does not create a substantive right.397
386. See Greenwood, 615 F.3d at 1205 (“We conclude that Congress meant what it said
in using the term ‘sue,’ and that it did not mean ‘arbitrate.’”).
Additionally, Judge Tashima found instructive the fact that each of the rights stated alongside the right to sue in section 1679c is separately stated elsewhere in the statute, showing that Congress included the disclosure provision simply to ensure the disclosure of rights that are then granted
387. See id. at 1207.
388. See id. at 1208; see also supra note 369 and accompanying text. 389. Greenwood, 615 F.3d at 1209.
390. See id.
391. See id. at 1208; see also Brief of Appellant at 19, Greenwood, 615 F.3d 1204 (9th
Cir. 2010) (No. 09-15906) (“[B]y including ‘or any other person’ in the same sentence that addresses Federal and State courts, Congress acknowledged that arbitrators . . . may decide CROA claims.”).
392. See Greenwood, 615 F.3d at 1208. 393. See id. at 1211.
394. Id. at 1211. 395. See id. at 1211–14.
396. See id. at 1214 (Tashima, J., dissenting). 397. See id. at 1215.
elsewhere.398 Judge Tashima argued that the civil liability provision in section 1679g corresponds to the “right to sue” language and provides consumers with a right of action that is not required to be enforced anywhere in the CROA.399 Furthermore, Judge Tashima argued that because section 1679c(a) only requires written disclosures but creates no substantive rights, that provision could not be the basis of an unwaivable right.400 Judge Tashima also endorsed the defense’s argument based on the “any other person” language, finding that this language reveals Congress’s acknowledgement that third parties such as arbitrators may decide such cases.401
Finally, Judge Tashima expressed disagreement with the majority’s reliance on the word “courts,” finding that such word choice merely indicates that questions of civil liability will ordinarily be resolved in a judicial forum.402 Pointing to the lack of both an inherent conflict and any dispositive legislative history, Judge Tashima cautioned against eschewing the holdings of the Third and Eleventh Circuits and endorsed the view that CROA claims are arbitrable.403